District heat networks could reduce cost of UK's low-carbon transition by £3bn
The installation of district heat networks could reduce the capital cost of the UK's heat networks by up to 40%, new research from the Energy Technologies Institute (ETI) has concluded.
In a report entitled district "heat networks in the UK: Potential barriers and opportunities", the ETI sets out eight “cost-saving” route maps for deploying low-carbon heat networks in the UK.
Released today (13 November), the report concludes that it is possible to reduce the cost of the nation’s low-carbon transition by as much as £3bn by using “innovative” solutions to bring down the cost of low-carbon heating.
Such solutions include designing devices with low flow rates, running pipes along the outside of buildings and developing “trenchless” technologies that eliminate the need for digging.
“Our research has shown that district heating has the potential to play an important role in the UK energy system, especially in its move to decarbonisation - but to fulfil this, it must evolve to be able to deliver more and larger schemes,” ETI’s programme manager Rebecca Sweeney said.
“The sector needs to deliver schemes more rapidly, more cost-effectively and to increase its focus on existing buildings. The ETI believes that improving current practice incrementally through ‘learning by doing’ alongside innovation are the primary ways to reduce cost in the deployment of infrastructure networks.”
One of the report’s key findings is the stark difference in the uptake of district heat networks between the UK and its counterparts in mainland Europe. In the UK, such networks only account for 2% of all space and water heating, while Germany has implemented policies requiring all towns with a population of more than 80,000 people to host at least one network, for example.
The ETI lists capital costs as the main barrier to UK adoption of low-carbon heat technologies, citing pipework, installation and connection costs as the three highest-cost areas of district heating projects.
In order to overcome these challenges, the report outlines best-practice advice on reducing the costs associated with district heat networks while maintaining optimum performance. It additionally emphasises the cost difference between installing such networks and relying on technologies such as ground or air-source heat pumps.
“Unfortunately, heat networks have a history of underperformance against design, resulting in higher capital and operating expenditure with lower investment returns,” the ETI’s Sweeney added.
“There is a balance to be struck between encouraging competition to drive improvements in cost and performance, whilst at the same time standardising the sector to enable common systems and scale, to improve costs.”
In order to strike this balance, the ETI is using the report to urge the UK Government and devolved governments across the nation to implement policies that spur knowledge transfer and skills development in the heat sector.
The organisation is additionally calling on businesses and trade bodies in the industry to develop a common set of standards – a move it claims will “present a clear, unified message for the market”.
The ETI report comes shortly after the Government’s launch of a £320m scheme to help accelerate the adoption of low-carbon heat technologies across the UK's public, private and domestic sectors. Called the Heat Networks Investment Project (HNIP) and overseen by the Department for Business, Energy & Industrial Strategy (BEIS), the scheme will offer grants and loans to businesses, hospitals, schools and local authorities with a heat network of two or more buildings.